Summary: Acquired in an off-market transaction, Metro Industrial Center is a 113,887 square foot business park in Phoenix comprised of six buildings, 63 units, and an in-place occupancy of 69%. The complex offers warehouse / office space and is conveniently located just a mile east of the I-17 Freeway and a mile northeast of the Metro Center Mall, which includes over 100 retail stores, several dining options, a multiplex cinema, and the Castles N’ Coasters theme park.
Value Add Goals: The six buildings were built from 1977-1980 and provide 18’ clear ceiling height for warehouse spaces with a 30% office buildout. The buildings have not been maintained and will need significant exterior improvements to convert to a competitive and leasable condition. The property has limited signage and there is an opportunity to make this asset more visible by upgrading the signage throughout as well as improving the landscaping and monument signage.
The Rose Garden and Metro Industrial Center assets are situated in the northern portion and the heart of the Interstate 17 Corridor, respectively. The properties are strategically positioned to offer tenants exceptional access to Phoenix’s freeway network as well as proximity to an abundance of amenities. A dense labor pool with a population of 2.47 million, representing 57% of the entire Phoenix metro area, lives within a 30-minute commute of Rose Garden and Metro Industrial. The northern region of the I-17 corridor also offers multiple executive housing options. Sky Harbor International Airport, Downtown Phoenix, Deer Valley and the Loop 101 freeway are also within a 30 minute drive.
Tenants at Rose Garden and Metro Industrial are part of an amenity-rich environment that offers 2 million SF of retail space, 75 restaurants and 16 hotels within 1.5 miles. While the nearby Metro Center Mall is improving with new ownership and fresh retail, restaurants and entertainment concepts, a $180 million expansion of Phoenix’s light rail line is also underway. Upon completion in 2016, the light rail will extend north to Dunlap and 19th Avenues (on which Rose Garden is located), with a future route to Interstate 17 via Dunlap Avenue scheduled.
Characterized by a diverse mix of industrial, high-tech commercial and office development, the I-17 Corridor is highly sought-after by employers for its access to a sizeable and skilled workforce, varying transportation options and numerous amenities. As a result, Rose Garden and Metro Industrial are surrounded by a host of large corporations, highlighted by Fortune 500 companies such as The Hartford, Cognizant Technology Solutions, Liberty Mutual and Wells Fargo. Other prominent corporate neighbors include Blue Cross Blue Shield, Karsten Manufacturing (Ping Golf), Suntron Corp. and Allied International.
The Black Canyon, Deer Valley, Central Phoenix and Grand Avenue submarkets comprise the I-17 Corridor, which continues to perform well with a 3.7% vacancy rate in competitive General Industrial and Business Park properties. Together, these submarkets have absorbed nearly 960,000 SF of general industrial space in the last 9 quarters. With current market area vacancy below 10%, no new construction, and almost 1 million square feet in recent positive net absorption, Rose Garden and Metro Industrial are ideally positioned to benefit from rapidly increasing lease rates as the market returns to supply shortages.